- SYED ABDUR RAHMAN, J.--This is a petition under Article 199 of the Constitution.
2. The case of the petitioner is that on the dates when import licenses were obtained by it and L/C was opened in relation to iron and steel scrap of U.K. Specifications for remitting and re-rolling at the rate of U.S. $131 per metric ton free out Karachi, the contract having been entered on 17-9-1987, import licence for 7500 metric tons obtained on 26-8-1987, an exemption was enforced in relation to the import of scrap.
1 3. Under SRO 505(1)/86 dated 29-5-1986 the customs duties were fixed at 51% and any duty payable in excess thereof was exempted. In so far as shredded scrap is concerned the customs duty was even less, namely Rs.418 per metric ton and sales tax was totally exempted under SRO 530(1)/86 dated 29-8-1986. The Government decided to remove the exemption with effect from 30-12-1987. Gazette Notification was not issued initially but three draft notifications without SRO numbers were forwarded to Customs House with instructions to apply the same with effect from 30-12-1987. So far as shredded scrap is concerned the pre-existing exemption from sales tax was withdrawn by purportedly delating the items from SRO No.530(1)/86, dated 29-8-1986. Customs duty which originally stood at the rate of Rs.418 per metric ton under entry No.73.03 of the Pakistan Customs Tariff was also modified. The result was that duty is now leviable at 20% ad valorem. In addition sales tax which was formerly exempted is now payable at 12-1/2%. In case of iron or steel scrap for re-rolling under PCT entries 73.06 to 73,08 and 73.15 and 73.16 the regulatory duty was 31% or so much so that total incidence thereof together with statutory customs duty was not less than 51% ad valorem. This has now been amended with the result that heading Nos.73.06 to 73.40 and the entries relating thereto in columns 2 & 3. Are omitted by means of the Notification dated 30-12- 1987.
4. It is alleged that the respondents refused to allow the clearance of the goods in the light of pre- existing classification of the duty structure and have orders on the Bill of Entry that duty would now be leviable under the new notification dated 30-12-1987. It was, therefore, prayed as follows:-- " (a) Declare that the goods imported, by the petitioner under Bill of Entry IGM No.2226/87 dated 12-11-1987 (i.e. Iron and Steel Scrap) is chargeable to duty and assessment as per previous classification of the duty in relation to re-rollable and shredded scrap i.e. Prior to the impugned notifications dated 30-12-1987.
(b)Declare that no sales tax is leviable on the import of shredded and bundled scrap imported by the petitioner.
(c)Declare that customs duty on shredded and bundled scrap imported by the petitioner is Rs.418 per metric ton.
(d)Declare that customs duties at a maximum rate of 51% are payable on the scrap meant for re- rolling imported by the petitioner.
(e)Declare that total customs duties in relation to re-meltable scrap imported by the petitioner are Rs-1070 per metric ton.
(f)Direct the Respondents to release the goods of petitioner at the declared value and restrain them from taking any action adverse to the interests of the petitioner.
(g)Such other relief as may be deemed appropriate by this Honourable Court.
(h)Costs of the petition."
5. We have heard Mr..Khalid Anwar, Advocate for the petitioner and Mr. Abdul Sattar, Advocate for the respondents. Mr. Khalid Anwar has drawn our attention to an unreported judgment of the Hon'ble Supreme Court in Civil Appeal Nos. 915-K to 918-K of 1990, which is identical to the present case. It will be useful to reproduce the following extracts from the judgment of the Hon'ble Supreme Court: "In the light of the aforesaid principles, it cannot straightaway be held that the mere fact that section 31-A has been given retrospective effect, it will affect even the past and dosed transactions or all the vested rights that have accrued. It is in this context that the remaining contentions of the learned counsel for the appellants are to be examined.
It has been urged on behalf of the appellants that as the bill of entry was presented in all these cases before 1st July, 1988, when section 31-A was enacted and enforced, their cases are past and closed transactions.
There seems to be a great deal of force in this submission. Before the insertion of section 31-A the position was that upon the presentation of a bill of entry, by virtue of section 30 of the Act the levy of duty was crystallised. As explained in the case of AI-Samrez Enterprise the liability to tax was created under section 18 with reference to this date, because it is the rate of duty by application of which the tax liability can be quantified or assessed. Simultaneously any benefit of exemption also takes effect on the same date because in the very nature of things, the liability is wiped off by virtue of the exemption at the same time. Therefore, this is the crucial point of time at which, by operation of law the liability is discharged. In other words, the rights and liabilities of the importers attained fixity on the said crucial date. Inevitably therefore a vested right has been created and the transaction is closed by the quantification of the tax, if any, or by the discharge of. Liability on that date. The mere fact that any proceedings remained pending for assessm ent of the tax by a statutory functionary for the purpose of recovery of the dues, will not prevent the law from operating and producing the result of closing the transaction As the bills of entry in all these cases were presented on dates prior to 1st July, 1988, all these cases are cases which were past and closed transactions and were not therefore affected by the provisions of section 31-A. The act of refusal on the part of the Customs Authorities to release the goods on the basis of the notifications prior to the impugned notifications and the demand of duty in accordance with the said notifications in the Constitutional petition was therefore without lawful authority and of no legal effect."
6. We are in respectful agreement with the observations made by the Honourable Supreme Court and the view expressed in the above judgment. Mr. Abdul Sattar, Advocate for the respondents was unable to rebut this argument.
7. In this case, the advance bill of entry was filed as 'far back as 12-11-1987 and manifested on the same date. The ex-bond bill of entry was also filed in May, 1988 well before 1st July, 1988. It therefore follows that as per the Supreme Court decision duty will have to be charged on the. Consignment imported on the basis of the legal position prevailing before the impugned notifications.
Accordingly, the case is to, be remanded to the Customs authorities for computing the duty on the basis that the iron and steel scrap which consists of the entire consignment is to be charged to duty on the basis of the pre-existing rates of duty prior to the impugned notifications dated 30-12- 1987. Since the consignment has already been released on the basis of the examination of goods carried out the customs authorities will recompute the duty on the above legal basis.
AA./D-102/K